VAIJINATH KISANRAO GAWADE ,PUNE vs. ITO WARD-14(5), PUNE

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.2705/PUN/2025 िनधा�रण वष� / Assessment Year : 2014-15 Vaijinath Kisanrao Gawade, Vs. ITO, Ward-14(5), Pune. A/p Gunawadi Gunwadi, Baramati, Dist. Pune- 413102. PAN : BBIPG2841K Appellant Respondent Assessee by : Shri Sharad A. Shah Revenue by : Shri Manish Mehta Date of hearing 16.03.2026 : Date of pronouncement 14.05.2026 : आदेश / ORDER PER VINAY BHAMORE, JM: This appeal filed by the assessee is directed against the order dated 30.09.2025 passed by Ld. CIT(A)/NFAC for the assessment year 2014-15. 2. The appellant has raised the following grounds of appeal :- “1. The assessment order passed u/s 147 be declared as Null and void as it is not passed in accordance with law. 2. The notice issued u/s 147 by JAO is invalid as it was supposed to be issued by FAO, therefore the proceedings u/s 147 initiated against me may please be declared as null and void. 3. The Ld. AO erred in making (CIT-A erred in confirming) addition of Rs.50,65,000/- u/s 69A of the IT Act. 3.1 The Ld. AO and Ld. CIT-A ought to have appreciated all the evidence produced and ought to have considered the fact that

2 ITA No.2705/PUN/2025 cash deposit of Rs.50,65,000/- is out of genuine and explained sources. 4. The appellant craves its right to add to or alter the Grounds of Appeal at any time before or during the course of hearing of the case.” 3. Facts of the case, in brief, are that the assessee is an individual engaged in the business activity such as dairy farming, hiring of tractors, agricultural equipment and also having rental income from marriage hall and has not furnished his return of income for the year under consideration. On the basis of information available with the Department that the assessee has deposited cash of Rs.50,65,000/- in his bank account maintained with PDCC Bank Ltd., Pune, during the year under consideration, however, no return of income was furnished, the case of the assessee was reopened u/s 147 of the IT Act. After passing order u/s 148A(d) of the IT Act on 18.07.2022, notice u/s 148 of the IT Act was issued on 19.07.2022. Assessee furnished return of income on 27.09.2022 in response to above notice by declaring income of Rs.8,85,570/-. Subsequently, notices u/s 143(2), 142(1) and show cause notice respectively were issued to the assessee. After considering the reply and submissions of the assessee, vide order dated 23.05.2023 the Assessing Officer completed the assessment u/s 147 r.w.s. 144B of the IT Act by determining

3 ITA No.2705/PUN/2025 income of Rs.59,50,570/- as against the income of Rs.8,85,570/- returned by the assessee. The above assessed income includes the addition of Rs.50,65,000/- as unexplained money u/s 69A of the IT Act deposited in bank accounts. 4. Being aggrieved with the above assessment order, the assessee preferred an appeal before Ld. CIT(A)/NFAC. After considering the reply and submissions of the assessee, Ld. CIT(A)/NFAC confirmed the addition of Rs.50,65,000/- u/s 69A of the IT Act made by the Assessing Officer and dismissed the appeal filed by the assessee. 5. It is the above order against which the assessee is in appeal before this Tribunal. 6. We have heard Ld. Counsels from both the sides and perused the material available on record including the paper book and written submissions furnished by the assessee, as well as by Ld. DR. We find that the counsel of the assessee furnished an application through which the ground no.2 relating to JAO/ FAO issue was withdrawn, accordingly the same is dismissed as withdrawn. 7. With regard to ground no.1, we find that it is the contention of the assessee that the reassessment order dated 23.05.2023

4 ITA No.2705/PUN/2025 passed u/s 147 r.w.s. 144B of the IT Act is null and void since the notice issued u/s 148 of the IT Act is time barred being issued beyond the surviving period of limitation prescribed/approved by Hon’ble Supreme Court in the case of UOI vs. Rajiv Bansal (2024) 469 ITR 46 (SC). 8. In this regard, we find that the Assessing Officer issued notice u/s 148 of the IT Act on 29.06.2021. Subsequently, in view of the decision of the Hon’ble Supreme Court in the case of Union of India vs. Ashish Agarwal, reported in [2022] 444 ITR 1 (SC), original notice issued u/s 148 on 29.06.2021 was deemed to be issued u/s 148A(b) of the IT Act. Vide show cause notice dated 23.05.2022, the information and material relied upon by the Revenue was provided to the assessee and two week’s time was granted to the assessee to respond on or before 07.06.2022 in terms of the provisions of section 148A(b) of the IT Act. 9. Since no reply was filed by the assessee, an order u/s 148A(d) of the IT Act was passed on 18.07.2022 declaring that it is a fit case for issuance of notice u/s 148 of the IT Act. Thereafter, on 19.07.2022, notice u/s 148 of the IT Act was issued by the Jurisdictional Assessing Officer. Now, through ground no.1 the assessee is challenging the above notice dated 19.07.2022 issued

5 ITA No.2705/PUN/2025 u/s 148 of the IT Act being issued beyond the surviving period as prescribed by Hon’ble Supreme Court of India in the case of Union of India vs. Rajeev Bansal (supra). 10. In support of his contentions, Ld. AR submitted that for assessment year 2014-15 which is the year under consideration, the limitation period available with the Assessing Officer u/s 149 for issuance of notice u/s 148 of the IT Act was till 31.03.2021 (since within six years from the relevant assessment year), and even if in the light of decision of the Hon’ble Supreme Court in the case of Union of India vs. Rajeev Bansal (supra), the surviving period is considered, the Assessing Officer had time only till 16.06.2022 to issue notice u/s 148 of the IT Act. Since Hon’ble Supreme Court in the case of Rejeev Bansal (supra) has categorically held that the surviving or balance time limit can be calculated by computing the number of days between the date of issuance of the deemed notice and 30.06.2021. In this regard, Ld. AR furnished a chart which is reproduced as under :- “Details w.r.t. surviving period calculation, post SC decision in case of Rajiv Bansal Particulars Date of Number of Recomputed Paper notice days dates Book Ref Original Notice u.s 148 29-06-2021 119 Fresh Notice u/s 18-07-2022 122 148A(d) After Ashis Agarwal Judgment Deemed Notice given 23-05-2022 Allowing 120

6 ITA No.2705/PUN/2025 u/s 148A(b) 2 Weeks time The surviving time 1 Day available for notice (conservat after applying Tola ively 2 days) The time given for 2 Weeks = response to Notice u/s 14 Days 148A(b) in (conservat consequence of Ashis ively 15 Agarwal judgement days) Additional time in view 6 days of 4th proviso to S.149 (conservat ively 7 days) Total days to be added 21 Days to 23-05-2022 (Conservat ively 24 days The date by which the 13-06-2022 Order u/s 148A(d) (Conservati ought to be passed vely 16-06- 2022) Order passed u/s 18-07-2022 122 to 148A(d) 124 Notice given u/s 148 19-07-2022 125 11. On the basis of above chart, Ld. AR submitted that the notice issued u/s 148 of the IT Act on 19.07.2022 for the assessment year 2014-15 is barred by limitation. Hence, it was submitted that the entire re-assessment proceedings culminating in the order dated 23.05.2023 passed u/s 147 r.w.s. 144B of the IT Act is void ab initio. Ld. AR placed reliance upon various judicial pronouncements, copy of which forms part of the legal paper book, which are as under :- (i) Rajiv bansal, 469 ITR 46. (ii) Kolte Patil ITA Nos.2023 and 2011/PUN/2024 (iii) Gulamahemad Hamidulla Khan, ITA No.166/PUN/2025.

7 ITA No.2705/PUN/2025 (iv) Pushpak Realities Pvt. Ltd., ITA No.4812/Mum/2024. (v) The Hisar Leading Bank Co-op Non-Agri., ITA No.5053/Del/2025. (vi) Communist Party of India (Marxist) vs. ITD, CIR Exempt [2025] 174 taxmann.com 925 (Delhi). (vii) Dy. CIT vs. Larsen & Toubro Ltd. [2025] 173 taxmann.com 582 (Mumbai – Trib.). 12. On the other hand, Ld. DR submitted that the first notice issued u/s 148 of the IT Act on 29.06.2021 was protected by Hon’ble Supreme Court vide its decision in Ashish Agarwal (supra), and therefore, all the proceedings subsequent thereto are pursuant to the directions of the Hon’ble Supreme Court. Thus, Ld. DR submitted that the notice dated 19.07.2022 issued u/s 148 of the IT Act cannot be challenged on the ground of limitation, as the same was issued pursuant to the guidelines laid down by Hon’ble Supreme Court in Ashish Agarwal (supra), which were not amended in the subsequent decision of Hon’ble Supreme Court in Rajeev Bansal (supra). Ld. DR further submitted that as per the third proviso to section 149 of the IT Act, as amended by the Finance Act, 2021, the time period from the date of issuance of deemed show cause notice till the date of filing of response by the assessee shall be excluded for the purpose of computation of time limit for issuance of notice u/s 148 of the IT Act. Ld. DR submitted that as per the fourth proviso to section 149 of the IT

8 ITA No.2705/PUN/2025 Act if after exclusion of the aforesaid time period, the period of limitation available to the Assessing Officer is less than 7 days, then such remaining period shall be extended to 7 days and the period of limitation u/s 149 of the IT Act shall be deemed to be extended accordingly. Further, by referring to the provisions of section 148A(d) of the IT Act, Ld. DR submitted that the Assessing Officer has time period of one month from the end of the month in which the reply is received from the assessee to pass the order. Thus, it was submitted that since in the present case, the assessee did not filed its reply on 07.06.2022, i.e. within two weeks from the date of issue of notice u/s 148A(b) of the IT Act which is 23.05.2022, the order passed u/s 148A(d) and notice issued u/s 148 of the Act on 19/07/2022 is within the limitation period. In support of its contentions, Ld. DR also furnished written submission. Accordingly, Ld. DR requested to dismiss the appeal filed by the assessee. 13. We have considered the submissions of both the sides and perused the material available on record. 14. From a plain reading of section 149 of the IT Act, prior to its amendment by the Finance Act, 2021, it is evident that the same provides period of 4 years, upto 6 years, and upto 16 years for

9 ITA No.2705/PUN/2025 issuance of notice u/s 148 of the IT Act, provided the conditions laid down therein are satisfied. In the present case, it cannot be disputed that the time limit of 4 years from the end of the relevant assessment year, i.e., assessment year 2014-15, expired on 31.03.2019, and the period of 6 years from the end of the relevant assessment year expired on 31.03.2021. Therefore, in the present case, the date is covered under the provisions of the TOLA, i.e. from 20.03.2020 to 31.03.2021. It is evident from the record that the original notice u/s 148 of the IT Act, which was deemed to be a notice issued u/s 148A(b) of the IT Act pursuant to the decision of the Hon’ble Supreme Court in Ashish Agarwal (supra), was issued on 29.06.2021. We find that the Hon’ble Supreme Court in Rajeev Bansal (supra) in paragraph-114(b) held that the TOLA will continue to apply to the IT Act after 01.04.2021, if any, action or proceeding specified under the substituted provisions of the IT Act falls for completion between 20.03.2020 and 31.03.2021. Therefore, applying the aforesaid ratio of the Hon’ble Supreme Court to the facts of the present case, we are of the considered view that as the period of 6 years from the end of the relevant assessment year [2014-15] expires on 31.03.2021, which fell within the period from 20.03.2020 to 31.03.2021, therefore, the

10 ITA No.2705/PUN/2025 notice issued on 29.06.2021, which was deemed to be noticed u/s 148A(b) of the IT Act, is covered under the extended time limit till 30.06.2021 provided under the TOLA. 15. As regards the submission of Ld. DR that the time period from the date of issuance of the deemed show cause notice till the date of filing of response by the assessee shall be excluded under the third proviso to section 149 of the Act, we find that the Hon’ble Supreme Court in paragraph-106 and 107 of its decision in Rajeev Bansal (supra), observed as follows :- “106. In Ashish Agarwal (supra), this Court directed the assessing officers to provide relevant information and materials relied upon by the Revenue to the assesses within thirty days from the date of the judgment. A show cause notice is effectively issued in terms of Section 148A(b) only if it is supplied along with the relevant information and material by the assessing officer. Due to the legal fiction, the assessing officers were deemed to have been inhibited from acting in pursuance of the Section 148A(b) notice till the relevant material was supplied to the assesses. Therefore, the show cause notices were deemed to have been stayed until the assessing officers provided the relevant information or material to the assesses in terms of the direction issued in Ashish Agarwal (supra). To summarize, the combined effect of the legal fiction and the directions issued by this Court in Ashish Agarwal (supra) is that the show cause notices that were deemed to have been issued during the period between 1 April 2021 and 30 June 2021 were stayed till the date of supply of the relevant information and material by the assessing officer to the assessee. After the supply of the relevant material and information to the assessee, time begins to run for the assesses to respond to the show cause notices. 107. The third proviso to Section 149 allows the exclusion of time allowed for the assesses to respond to the show cause notice under section 149A(b) to compute the period of limitation. The third proviso excludes "the time or extended time allowed to the assessee." Resultantly, the entire time allowed to the assessee to respond to the show cause notice has to be excluded for computing the period of limitation. In Ashish Agarwal (supra), this Court provided two weeks

11 ITA No.2705/PUN/2025 to the assesses to reply to the show cause notices. This period of two weeks is also liable to be excluded from the computation of limitation given the third proviso to Section 149. Hence, the total time that is excluded for computation of limitation for the deemed notices is: (i) the time during which the show cause notices were effectively stayed, that is, from the date of issuance of the deemed notice between 1 April 2021 and 30 June 2021 till the supply of relevant information or material by the assessing officers to the assesses in terms of the directions in Ashish Agarwal (supra); and (ii) two weeks allowed to the assesses to respond to the show cause notices.” 16. From the perusal of the aforesaid findings of the Hon’ble Supreme Court in Rajeev Bansal (supra), it is evident that the Hon’ble Supreme Court directed that while computing the time limit for issuance of notice u/s 148, the time during which the show cause notice was stayed till the supply of relevant information or material by the Assessing Officer and further period of two weeks allowed to the assessee to respond to the show cause notice should be excluded. We find that while examining the validity of notices issued from 01.04.2021 to 30.06.2021 under the old regime, Hon’ble Supreme Court in Rajeev Bansal (supra), analyzing the interplay of Ashish Agarwal (supra) with the TOLA, in paragraph-108 of its judgment observed as follows :- “108. The Income Tax Act read with TOLA extended the time limit for issuing reassessment notices under Section 148, which fell for completion from 20 March 2020 to 31 March 2021, till 30 June 2021. All the reassessment notices under challenge in the present appeals were issued from 1 April 2021 to 30 June 2021 under the old regime. Ashish Agarwal (supra) deemed these reassessment notices under the old regime as show cause notices under the new regime with effect from the date of issuance of the reassessment notices. The effect of

12 ITA No.2705/PUN/2025 creating the legal fiction is that this Court has to imagine as real all the consequences and incidents that will inevitably flow from the fiction. 163 Therefore, the logical effect of the creation of the legal fiction by Ashish Agarwal (supra) is that the time surviving under the Income Tax Act read with TOLA will be available to the Revenue to complete the remaining proceedings in furtherance of the deemed notices, including issuance of reassessment notices under Section 148 of the new regime. The surviving or balance time limit can be calculated by computing the number of days between the date of issuance of the deemed notice and 30 June 2021.” 17. Thus, Hon’ble Supreme Court held that the surviving time under the IT Act read with TOLA will be available to the Revenue to complete the remaining proceedings in furtherance of the deemed notice, including issuance of re-assessment notice u/s 148 of the IT Act under the new regime. While explaining the methodology for computation of the surviving or balance time limit, the Hon’ble Supreme Court in paragraph-112 of Rajeev Bansal (supra) observed as follows :- “112. Let us take the instance of a notice issued on 1 May 2021 under the old regime for a relevant assessment year. Because of the legal fiction, the deemed show cause notices will also come into effect from 1 May 2021. After accounting for all the exclusions, the assessing officer will have sixty-one days [days between 1 May 2021 and 30 June 2021] to issue a notice under Section 148 of the new regime. This time starts ticking for the assessing officer after receiving the response of the assessee. In this instance, if the assessee submits the response on 18 June 2022, the assessing officer will have sixty one days from 18 June 2022 to issue a reassessment notice under Section 148 of the new regime. Thus, in this illustration, the time limit for issuance of a notice under Section 148 of the new regime will end on 18 August 2022.”

13 ITA No.2705/PUN/2025 18. Therefore, the surviving/balance time limit can be calculated by computing the number of days between the date of issuance of deemed notice and 30.06.2021. In order to compute the surviving/balance time as per the decision of the Hon’ble Supreme Court in paragraph-108, it is relevant to note the following dates: - S.No. Particulars Dates 1 Period of Limitation under the Old Act 31.03.2021 2 First Notice issued u/s 148 29.06.2021 3 Extended Limitation as per the TOLA 30.06.2021 4 Surviving Time 2 Days 5 Date Of Decision of Ashish Agarwal 04.05.2022 6 Notice u/s 148A(b) 23.05.2022 7 Time Given Two weeks 8 Assessee’s Reply due on 07-06-2022 Not filed 07- 06-2022 9 Surviving Time Limit 2 days 29th June To 30th 09-06-2022 June 2021 10 Extended Time limit upto 7 days 16-06-2022 11 Order U/s 148A(d) 18.07.2022 12 Second notice u/s 148 19.07.2022 19. Therefore, computing the surviving/balance time limit, as per the decision of the Hon’ble Supreme Court in Rajeev Bansal (supra), we find that the Revenue had only 2 days (i.e., between 29.06.2021 to 30.06.2021) to issue notice u/s 148 of the IT Act of the new regime in the present case, i.e. till 09.06.2022, after scheduled date of receipt of the response from the assessee on 07.06.2022 to the show cause notice dated 23.05.2022 issued u/s 148A(b) of the IT Act. However, undisputedly, in the present case, the notice u/s 148 of the IT Act was issued on 19.07.2022,

14 ITA No.2705/PUN/2025 i.e., 32 days after the surviving/balance time period as per the decision of the Hon’ble Supreme Court in Rajeev Bansal (supra). 20. From the above chart, we find that even if the benefit of the fourth proviso to section 149 of the IT Act is granted to the Revenue, since the remaining period in the present case, after the exclusion of time period as provided in the third proviso to section 149, is less than 7 days, even then the notice dated 19.07.2022 u/s 148 of the IT Act was issued much beyond the 7 days’ extension provided in the fourth proviso to section 149 of the IT Act. 21. As regards the other contention of Ld. DR that as per the provisions of section 148A(d) of the IT Act, the Assessing Officer has time period of one month from the end of the month in which the reply is received from the assessee, and therefore, since in the present case, the assessee did not filed its reply on 07.06.2022, the order passed u/s 148A(d) and notice issued u/s 148 of the Act on 19.07.2022 is within the limitation period, we find that similar argument of the Revenue was negated by the Hon’ble Bombay High Court in the case of Hitesh Ramniklal Shah vs. Assistant Commissioner of Income-tax [2025] 180 taxmann.com 642 (Bombay) by observing as under :- “20. We have heard the learned Counsel for the parties. We have also perused the papers and proceedings in the above Writ Petition. In

15 ITA No.2705/PUN/2025 view of the controversy involved, it is necessary to refer to the judgment of the Hon'ble Supreme Court in Rajeev Bansal (supra) which held as under:- "....49. The first proviso to Section i49(i)(b) requires the determination of whether the time limit prescribed under section 149(1)(b) of the old regime continues to exist for the assessment year 2021-2022 and before. Resultantly, a notice under Section 148 of the new regime cannot be issued if the period of six years from the end of the relevant assessment year has expired at the time of issuance of the notice. This also ensures that the new time limit of ten years prescribed under section 149(1) (b) of the new regime applies prospectively. For example, for the assessment year 2012-2013, the ten year period would have expired on 31 March 2023, while the six year period expired on 31 March 2019. Without the proviso to Section 149(1)(b) of the new regime, the Revenue could have had the power to reopen assessments for the year 2012-2013 if the escaped assessment amounted to Rupees fifty lakhs or more. The proviso limits the retrospective operation of Section 149(1)(b) to protect the interests of the assesses. ****** .....105. A direction issued by this Court in the exercise of its jurisdiction under Article 142 is an order of a court. The third proviso to Section 149 of the new regime provides that the period during which the proceedings under section 148A are stayed by an order or injunction of any court shall be excluded for computation of limitation. During the period from the date of issuance of the deemed notice under section 148A(b) and the date of the decision of this Court in Ashish Agarwal (supra), the assessing officers were deemed to have been prohibited from passing a reassessment order. Resultantly, the show cause notices were deemed to have been stayed by order of this Court from the date of their issuance (somewhere from 1 April 2021 till 30 June 2021) till the date of decision in Ashish Agarwal (supra), that is, 4 May 2022 106. In Ashish Agarwal (supra), this Court directed the assessing officers to provide relevant information and materials relied upon by the Revenue to the assesses within thirty days from the date of the judgment. A show cause notice is effectively issued in terms of Section 148A(b) only if it is supplied along with the relevant information and material by the assessing officer. Due to the legal fiction, the assessing officers were deemed to have been inhibited from acting in pursuance of the Section 148A(b) notice till the relevant material was supplied to the assesses. Therefore, the show cause notices were deemed to have been stayed until the assessing officers provided the relevant information or material to the assesses in terms of the direction issued in Ashish Agarwal (supra). To summarize, the combined effect of the legal fiction and the directions issued by this Court in Ashish Agarwal (supra) is that the show cause notices that

16 ITA No.2705/PUN/2025 were deemed to have been issued during the period between 1 April 2021 and 30 June 2021 were stayed till the date of supply of the relevant information and material by the assessing officer to the assessee. After the supply of the relevant material and information to the assessee, time begins to run for the assesses to respond to the show cause notices. 107. The third proviso to Section 149 allows the exclusion of time allowed for the assesses to respond to the show cause notice under section 149A(b) to compute the period of limitation. The third proviso excludes "the time or extended time allowed to the assessee." Resultantly, the entire time allowed to the assessee to respond to the show cause notice has to be excluded for computing the period of limitation. In Ashish Agarwal (supra), this Court provided two weeks to the assesses to reply to the show cause notices. This period of two weeks is also liable to be excluded from the computation of limitation given the third proviso to Section 149. Hence, the total time that is excluded for computation of limitation for the deemed notices is: (i) the time during which the show cause notices were effectively stayed, that is, from the date of issuance of the deemed notice between 1 April 2021 and 30 June 2021 till the supply of relevant information or material by the assessing officers to the assesses in terms of the directions in Ashish Agarwal (supra); and (ii) two weeks allowed to the assesses to respond to the show cause notices b. Interplay of Ashish Agarwal with TOLA 108. The Income-tax Act read with TOLA extended the time limit for issuing reassessment notices under section 148, which fell for completion from 20 March 2020 to 31 March 2021, till 30 June 2021. All the reassessment notices under challenge in the present appeals were issued from 1 April 2021 to 30 June 2021 under the old regime. Ashish Agarwal (supra) deemed these reassessment notices under the old regime as show cause notices under the new regime with effect from the date of issuance of the reassessment notices. The effect of creating the legal fiction is that this Court has to imagine as real all the consequences and incidents that will inevitably flow from the fiction. East End Dwellings Co. Ltd. v. Finsbury Borough Council [1952] AC 109. [Lord Asquith, in his concurring opinion, observed: "If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it."] Therefore, the logical effect of the creation of the legal fiction by Ashish Agarwal (supra) is that the time surviving under the Income- tax Act read with TOLA will be available to the Revenue to complete the remaining proceedings in furtherance of the deemed notices, including issuance of reassessment notices under section 148 of the new regime. The surviving or balance time limit can be calculated by

17 ITA No.2705/PUN/2025 computing the number of days between the date of issuance of the deemed notice and 30 June 2021. 109. If this Court had not created the legal fiction and the original reassessment notices were validly issued according to the provisions of the new regime, the notices under section 148 of the new regime would have to be issued within the time limits extended by TOLA. As a corollary, the reassessment notices to be issued in pursuance of the deemed notices must also be within the time limit surviving under the Income-tax Act read with TOLA. This construction gives full effect to the legal fiction created in Ashish Agarwal (supra) and enables both the assesses and the Revenue to obtain the benefit of all consequences flowing from the fiction. 110. The effect of the creation of the legal fiction in Ashish Agarwal (supra) was that it stopped the clock of limitation with effect from the date of issuance of Section 148 notices under the old regime [which is also the date of issuance of the deemed notices]. As discussed in the preceding segments of this judgment, the period from the date of the issuance of the deemed notices till the supply of relevant information and material by the assessing officers to the assesses in terms of the directions issued by this Court in Ashish Agarwal (supra) has to be excluded from the computation of the period of limitation. Moreover, the period of two weeks granted to the assesses to reply to the show cause notices must also be excluded in terms of the third proviso to Section 149. 111. The clock started ticking for the Revenue only after it received the response of the assesses to the show causes notices. After the receipt of the reply, the assessing officer had to perform the following responsibilities: (i) consider the reply of the assessee under section 149A(c); (ii) take a decision under section 149A(d) based on the available material and the reply of the assessee; and (iii) issue a notice under section 148 if it was a fit case for reassessment. Once the clock started ticking, the assessing officer was required to complete these procedures within the surviving time limit. The surviving time limit, as prescribed under the Income-tax Act read with TOLA, was available to the assessing officers to issue the reassessment notices under section 148 of the new regime. 112. Let us take the instance of a notice issued on 1 May 2021 under the old regime for a relevant assessment year. Because of the legal fiction, the deemed show cause notices will also come into effect from 1 May 2021. After accounting for all the exclusions, the assessing officer will have sixty-one days [days between 1 May 2021 and 30 June 2021] to issue a notice under section 148 of the new regime. This time starts ticking for the assessing officer after receiving the response of the assessee. In this instance, if the assessee submits the response on 18 June 2022, the assessing officer will have sixty-one days from 18 June 2022 to issue a reassessment notice under section 148 of the new regime. Thus, in this illustration, the time limit for

18 ITA No.2705/PUN/2025 issuance of a notice under section 148 of the new regime will end on 18 August 2022. 113. In Ashish Agarwal (supra), this Court allowed the assesses to avail all the defences, including the defence of expiry of the time limit specified under section 149(1). In the instant appeals, the reassessment notices pertain to the assessment years 2013-2014, 2014-2015, 2015-2016, 2016-2017, and 2017-2018. To assume jurisdiction to issue notices under section 148 with respect to the relevant assessment years, an assessing officer has to: (i) issue the notices within the period prescribed under section 149(1) of the new regime read with TOLA; and (ii) obtain the previous approval of the authority specified under section 151. A notice issued without complying with the preconditions is invalid as it affects the jurisdiction of the assessing officer. Therefore, the reassessment notices issued under section 148 of the new regime, which are in pursuance of the deemed notices, ought to be issued within the time limit surviving under the Income-tax Act read with TOLA. A reassessment notice issued beyond the surviving time limit will be time-barred." (emphasis supplied) 21. Subsequently several High Courts have considered the judgment in Rajeev Bansal while dealing with the issue of the surviving period. The Delhi High Court in Ram Balaram Buildhome (P.) Ltd (supra) while considering the issue held as under:- ".... 65. Thus, in the facts of the present case, the last date for issuance of notice under Section 148 of the Act for AY 2013-14 under the statutory framework, as was existing prior to 01.04.2021 was 31.03.2020, that is, six years from the end of the relevant assessment year. 66. By virtue of Section 3(1) of TOLA time for completion of specified acts, which fell during the period 20.03.2020 to 31.12.2020 were extended till 30.06.2021. Thus, the notice dated 01.06.2021 was issued twenty-nine days prior to the expiry of period of limitation for issuing a notice under Section 148 of the Act as was extended by TOLA. As noted above, the period from 01.06.2021, the date of issuance of notice, and 04.05.2022, being the date of decision of the Supreme Court in Ashish Agarwal (supra) is required to be excluded by virtue of the third proviso to Section 149(1) of the Act. 67. Additionally, the period from the date of decision in Ashish Agarwal (supra) till the date of providing material, as required to the accompanied with a notice under Section 148A(b) of the Act, is required to be excluded. Thus, the period between 04.05.2022 to 30.05.2022, the date on which the AO had issued the notice under Section 148A(b) of the Act in furtherance of his earlier notice dated 01.06.2021, is also required to be excluded by virtue of the third

19 ITA No.2705/PUN/2025 proviso to Section 149(1) of the Act as held by the Supreme Court in Rajeev Bansal (supra). 68. In addition to the above, the time granted to the petitioner to respond to the notice dated 30.05.2022 - the period of two weeks -is also required to be excluded by virtue of the third proviso to Section 149(1) of the Act. The petitioner had furnished its response to the notice under Section 148A(b) of the Act on 13.06.2022. Thus, the period of limitation began running from that date. 69. As noted above, by virtue of TOLA, the AO had period of twenty- nine days limitation left on the date of commencement of the reassessment proceedings, which began on 01.06.2021, to issue a notice under Section 148 of the Act. The said notice was required to be accompanied by an order under Section 148A(d) of the Act. Thus, the AO was required to pass an order under Section 148A(d) of the Act within the said twenty-nine days notwithstanding the time stipulated under Section 148A(d) of the Act. This period expired on 12.07.2022. 70. Since the period of limitation, as provided under Section 149(1) of the Act, had expired prior to issuance of the impugned notice on 30.07.2022. The said is squarely beyond the period of limitation. " 22. The Gujarat High Court in Dhanraj Govindram Kella (supra) while considering the issue held as under:- ".65. The alternative contention of the petitioner as to whether notices would be valid notice or invalid notice considering 'surviving time' between the date of the issuance of notices under TOLA and 30th June, 2021 or not is required to be considered and for that each matter has to be considered separately on the basis of the facts of case considering the date of issuance of notices under section 148 under TOLA by the Revenue and thereafter date of supplying information to the assessee and date of passing of order under section 148A(d) and date of issuance of notice under section 148 of the Act so as to consider whether issuance of notice under section 148 of the Act is within 'surviving time' as per the direction of Hon'ble Apex Court in case ofRajeev Bansal (supra) or not. 66. So far as Assessment Years 2013-2014 and 2014-2015 are concerned, the period of three years from the end of the assessment year would be over prior to 20.03.2020 and the period of six years would be over between 20.03.2020 and 30.06.2021. Therefore, the notices issued under section 148 of the Act under old regime between 01.04.2021 and 30.06.2021 as per TOLA, will be a valid notice if the notice under section 148 of the Act under new regime is issued within the period of 'surviving time' as per the directions issued by Hon'ble Apex Court in case of Rajeev Bansal (supra). For the Assessment Years 2016-2017 and 2017-2018 are concerned, the notice issued under section 148 of the Act under old regime between 01.04.2021 and 30.06.2021 under TOLA would be considered to be issued within

20 ITA No.2705/PUN/2025 three years from the end of the relevant assessment year as three years would complete within the period of 20.03.2020 and 30.06.2021. 67. Therefore, in facts of these petitions, following data is required to be considered to find out 'surviving time' to decide as to whether the impugned notices under section 148 of the Act issued under the new regime as per the decision of Hon'ble Apex Court in case of Ashish Agarwal (supra) would be valid notice or not in view of the decision of the Hon'ble Apex Court in case of Rajeev Bansal (supra): SCA NO AY Date of notice No of days of Date of providing under section surviving time information under 148 under available till section 148A(b) TOLA 30.06.2021 6387/2023 2013 2014 17.06.2021 13 26.05.2022 5688/2023 2014 2015 09.06.2021 21 23.05.2022 22260/2022 2016 2017 30.06.2021 1 23.05.2022 996/2023 2017 2018 30.06.2021 1 24.05.2022 SCA NO Due date of Date of reply:- Date of order Last date for filing reply under section issuance of notice 148A(d) and notice under section 148 under section as per surviving 148:- time:- 6387/2023 09.06.2022 04.06.2022 29.07.2022 22.06.2022 5688/2023 06.06.2022 - 27.07.2022 27.06.2022 22260/2022 07.06.2022 06.07.2022 30.07.2022 14.06.2022 996/2023 11.06.2022 10.06.2022 19.07.2022 18.06.2022 68. It is apparent from the above details that impugned notice under section 148 of the Act is issued beyond the period of 'surviving time' as per the direction of Hon'ble Apex Court in case of Rajeev Bansal (supra)and therefore, such notices would be invalid notices. " 23. The Madras High Court in Mrs.Thulasidass Prabavathi (supra), while considering the issue held as under:- "....17. Dealing with almost an identical situation pursuant to the decision of the Hon'ble Supreme Court in Union of India v. Rajeev Bansal, 2024 SCC OnLine SC 2693, the Delhi High Court quashed the notice dated 31.03.2021 issued to the assessee under Section 148 of the Act and the proceedings. Since the law laid down by the Hon'ble Supreme Court in Union of India v. Rajeev Bansal, 2024 SCC OnLine SC 2693 is a settled law, it is binding on this Court. I am therefore unable to take a contra view in the light of the aforesaid decision of the Hon'ble Supreme Court in Union of India v. Rajeev Bansal, 2024 SCC OnLine SC 2693."

21 ITA No.2705/PUN/2025 24. Based on the above, we observe that a notice under Section 148 of the Act cannot be issued if the period of six years from the end of the relevant assessment year has expired at the time of issuance of the notice relying on the first proviso to Section 149 of the Act. Hence, the submission of the Respondent that a period of ten years is available to issue the notice under Section 148 of the Act is misconceived. 25. Further, we find that the second ground was urged before this Court in the case of Gurpreet Singh (supra) where the Court records the argument of the Respondent [in paragraph 7(vii)] that the order under Section 148A(d) is to be passed within one month from the end of the month in which the reply has been received, specifically rejected the same in paragraph 18 as Section 148A(d) does not govern the computation of time as contemplated in terms of Section 149 of the Act. The said paragraph 18 is reproduced hereunder:- ".....18. The said contention is fundamentally misconceived. A notice under Section 148 of the IT Act accompanied by an order under Section 148A(d) is required to be issued within the time stipulated under Section 149 of the IT Act. Section 148A(d) does not govern the computation of time as contemplated in terms of Section 149 of the IT Act. The entire process under Section 148A(a) to (d) and the issuance of notice under Section 148 has to be completed within the total time available in terms of Section 149(1) of the IT Act for issuance of notice under Section 148. A notice issued under Section 148 of the IT Act which is beyond the time line stipulated under Section 149(1) is non-complaint and invalid. The timeline under Section 148A(d) is for the Assessing Officer to comply with the stipulations and the streamlining contemplated under Section 148A. This is primarily to bring in transparency and accountability into the system and is intended for the benefit of the assessees. However to suggest that Section 148A(d) extends the time limit under Section 149(1) and/or has a bearing on the time under Section 149(1) is a submission which is misconceived and lacks legal sanctity." emphasis supplied 26. After considering the above exclusion period, we observe that the remaining days for conclusion of the procedure for passing of an order in terms of Section 148A(d) and issuance of the notice under Section 148 of the Act would be two days. In the present case, whichever way we see it, the period of two days would expire on 10 June 2022 or 27 June 2022 respectively and, therefore, the notice under Section 148 of the Act issued on 27 July 2022 is time barred, inasmuch as it is issued much after the surviving period. We concur with the judgments of the co-ordinate bench in Gurpreet Singh (supra), of the Delhi High Court in Ram Balram Buildhome (P.) Ltd (supra) and the Gujarat High Court in Dhanraj Govindram Kalle (supra) which have dealt with the surviving period and quashed the notices issued under Section 148 of the Act passed beyond the surviving period.

22 ITA No.2705/PUN/2025 27. In view of the above, it is apparent that Respondent No.1 has acted beyond jurisdiction and we accordingly set aside the impugned notice issued under Section 148 of the Act as well as all the subsequent notices issued under Section 142(1) and the show cause notice on the above ground. The other contentions raised by the Petitioner are kept open.” 22. Therefore, respectfully following the above judgement of Hon’ble Bombay High Court in the case of Hitesh Ramniklal Shah (supra), we do not find any merits in the submission of Ld. DR. Therefore, having considered the provisions of the IT Act, pre as well as post the amendment by the Finance Act, 2021, and the TOLA, in the light of the decision of the Hon’ble Supreme Court in Ashish Agarwal (supra) and Rajeev Bansal (supra), and the judgement of Hon’ble Bombay High Court in the case of Hitesh Ramniklal Shah (supra), we are of the considered opinion that the notice issued u/s 148 of the IT Act on 19.07.2022 is barred by limitation period specified u/s 149 of the IT Act and accordingly we declare the impugned notice dated 19.07.2022 issued u/s 148 of the IT Act as void ab initio and bad in law. Therefore, the same is quashed. Consequently, the entire re-assessment proceedings and assessment order passed u/s 147 r.w.s. 144B of the IT Act are also quashed. Thus, the ground no 1 raised by the assessee is allowed. Since we have quashed the reassessment order by allowing ground no.1 raised by the assessee, the remaining grounds involving

23 ITA No.2705/PUN/2025 merits of the case becomes infructuous, hence not adjudicated by us. 23. In the result, the appeal filed by the assessee is allowed. Order pronounced on this 14th day of May, 2026. Sd/- Sd/- (R. K. PANDA) (VINAY BHAMORE) VICE PRESIDENT JUDICIAL MEMBER पुणे / Pune; �दनांक / Dated : 14th May, 2026. Sujeet/DOC Digitally signed by Sujeet Kumar Sujeet Kumar Sharma Sharma Date: 2026.05.14 आदेश क� �ितिलिप अ�ेिषत / Copy of the Order forwarded to : 17:10:13 +05'30' अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The Pr. CIT concerned. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, “B” ब�च, 4. पुणे / DR, ITAT, “B” Bench, Pune. गाड� फ़ाइल / Guard File. 5. आदेशानुसार / BY ORDER, // True Copy // Assistant Registrar आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.